Failing to comply with industry security standards is one of the top reasons why merchants become victims of e-commerce fraud. Aside from knowing why and how ecommerce fraud occurs, it is also important to understand the various types of fraud to protect yourself from each. Online frauds come in various forms and are very different from the usual scams that are seen to hit physical stores so hard.
There are multiple methods of fraud:
• Phishing: Any emails or websites that require personal or private information such as credit card, bank account or login credentials are prone to phishing.
• Payment fraud: Also known as Identity theft: Identity theft exists outside of the digital realm as well, but it's a common type of fraud online.
• Pagejacking: Hackers can reroute traffic from your ecommerce site by hijacking part of it and directing visitors to a different website.
• Advanced fee and wire transfer scams: Hackers target credit card users and ecommerce store owners by asking for money in advance in return for a credit card or money at a later date.
• Merchant identity fraud: This method involves criminals setting up a merchant account on behalf of a seemingly legitimate business and charging stolen credit cards.
• Friendly fraud: This can occur by design or by mistake. The basic premise is that a customer (legitimate or otherwise) will pay for a service or product which they claim is never delivered or was damaged on delivery. The merchant then has to issue a refund, re-deliver the item, or face a chargeback.
• Clean fraud: Refers to fraudulent transactions that appear to be legitimate. This involves using stolen credit card information to impersonate the card holder.
• Affiliate fraud: Through affiliate fraud, malicious actors can manipulate traffic and sign ups to make a merchant think they are receiving consumer attention that doesn’t actually exist.
• Triangulation fraud: This type of fraud is when online criminals set up a fake or replica website and entice buyers with cheap goods.
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